Google Pays Britain $185 Million to Settle Back Taxes

SAN FRANCISCO — Google on Friday agreed to pay 130 million pounds, or about $185 million in back taxes to Britain, making it the latest United States technology company to settle claims that it does not pay its fair share of taxes in Europe.

The sum covers taxes from 2005 to 2015 and Google said it would change how it calculates its tax payments in Britain so they are based on a percentage of local sales derived from the country.

“We will now pay tax based on revenue from U.K.-based advertisers, which reflects the size and scope of our U.K. business,” a Google spokesman wrote in an email. “The way multinational companies are taxed has been debated for many years and the international tax system is changing as a result.”

Last April, Britain adopted a so-called Google tax that would impose a levy on any international company that did not fairly pay taxes on profits generated from its British operations.

Google, which is now owned by a holding company called Alphabet and has its European headquarters in Ireland, is hardly the only technology company with European tax problems.

Various countries, including Germany and France, have criticized the complicated tax structures tech companies use to reduce their local taxes. Many of them route sales through lower-tax countries like Ireland, even if the sales are made in other nations.

In May, Amazon, which had been funneling most of its sales taxes through Luxembourg, a low-tax haven, said it would start paying taxes in European countries where it has large operations. Apple reached a deal to pay local Italian tax authorities in December after authorities there looked into whether the company tried to lower its taxes by moving more than $1 billion in revenue from its Italian operations through an Irish subsidiary.

The executive arm of the European Union, the European Commission, is also investigating whether Apple and Amazon receive unfair state support through low-tax agreements in Ireland and Luxembourg.

Mark Scott contributed reporting from London.

A version of this article appears in print on , on Page B3 of the New York edition with the headline: Back Taxes Settlement Costs Google $185 Million . Order Reprints | Today’s Paper | Subscribe